Annual inflation: 8.4% as at April 2009
Cumulative inflation since Jan 1981: 1 354.8%
Cumulative inflation since Apr 1994: 161.6%
Cumulative real value destruction since Jan 1981: 93.1%
Cumulative real value destructionm since April 1994: 61.8%
Real value unknowingly destroyed by SA accountants in all Retained Earnings remaining in SA companies from Jan 1981 to Apr 2009
93.1%
Real value unknowingly destroyed by SA accountants in Issued Share Capital of all SA companies with no variable real value non-monetary items to revalue from Jan 1981 to Apr 2009
93.1%
Real value unknowingly destroyed by SA accountants in all Retained Earnings remaining in companies from Apr 1994 to Apr 2009
61.8%
Real value unknowingly destroyed by SA accountants in Issued Share Capital of all SA companies with no variable real value non-monetary items to revalue from Apr 1994 to Apr 2009
61.8%
Sunday, 31 May 2009
Saturday, 30 May 2009
SA Inflation Facts as at March 2009
1347.9% The cumulative inflation rate in SA since January 1981.
160.3% The cumulative inflation rate in SA since April 1994.
50% of real value in all constant items never updated since April 1994 unknowingly destroyed by SA accountants by December 2005: i.e. in 11 years time by their implementation of the very destructive stable measuring unit assumption as part of the real value destroying traditional Historical Cost Accounting model.
50% of the real value of all Retained Earings in SA companies as at the end of April, 1994 unknowingly destroyed by SA accountants in 11 years.
61.6% of the real value of all retained earings in SA companies as at the end of April, 1994 unknowingly destroyed by SA accountants by March 2009.
61.6% of the real value of all issued share capital of all SA companies with no variable real value non-monetary items to revalue as at the end of April, 1994 unknowingly destroyed by SA accountants by March 2009.
This is the case when SA accountants choose - as they all do - to maintain the stable measuring unit assumption for an unlimited period of time during indefinite inflation when they choose to measure financial capital maintenance in nominal monetary units in terms of the IASB´s Framework, Par. 104 (a). SA accountants have unknowingly destroyed 61.6% of all Retained Earingins in all SA companies in this way since April 1994 - as long as they choose to maintain the stable measuring unit assumption for an unlimited period of time during indefinite inflation - all else being equal.
93.1% of the real value of all retained earings in SA companies as at the end of January, 1981 unknowingly destroyed by SA accountants by March 2009.
93.1% of the real value of all issued share capital of all SA companies with no variable real value non-monetary items to revalue as at the end of January, 1981 unknowingly destroyed by SA accountants by March 2009.
This is the case when SA accountants choose- as they all do - to maintain the stable measuring unit assumption for an unlimited period of time during indefinite inflation when they choose to measure financial capital maintenance in nominal monetary units in terms of the IASB´s Framework, Par. 104 (a). SA accountants have unknowingly destroyed 93.1% of all Retained Earingins in all SA companies in this way since January, 1981 - as long as they choose to maintain the stable measuring unit assumption for an unlimited period of time during indefinite inflation - all else being equal.
160.3% The cumulative inflation rate in SA since April 1994.
50% of real value in all constant items never updated since April 1994 unknowingly destroyed by SA accountants by December 2005: i.e. in 11 years time by their implementation of the very destructive stable measuring unit assumption as part of the real value destroying traditional Historical Cost Accounting model.
50% of the real value of all Retained Earings in SA companies as at the end of April, 1994 unknowingly destroyed by SA accountants in 11 years.
61.6% of the real value of all retained earings in SA companies as at the end of April, 1994 unknowingly destroyed by SA accountants by March 2009.
61.6% of the real value of all issued share capital of all SA companies with no variable real value non-monetary items to revalue as at the end of April, 1994 unknowingly destroyed by SA accountants by March 2009.
This is the case when SA accountants choose - as they all do - to maintain the stable measuring unit assumption for an unlimited period of time during indefinite inflation when they choose to measure financial capital maintenance in nominal monetary units in terms of the IASB´s Framework, Par. 104 (a). SA accountants have unknowingly destroyed 61.6% of all Retained Earingins in all SA companies in this way since April 1994 - as long as they choose to maintain the stable measuring unit assumption for an unlimited period of time during indefinite inflation - all else being equal.
93.1% of the real value of all retained earings in SA companies as at the end of January, 1981 unknowingly destroyed by SA accountants by March 2009.
93.1% of the real value of all issued share capital of all SA companies with no variable real value non-monetary items to revalue as at the end of January, 1981 unknowingly destroyed by SA accountants by March 2009.
This is the case when SA accountants choose- as they all do - to maintain the stable measuring unit assumption for an unlimited period of time during indefinite inflation when they choose to measure financial capital maintenance in nominal monetary units in terms of the IASB´s Framework, Par. 104 (a). SA accountants have unknowingly destroyed 93.1% of all Retained Earingins in all SA companies in this way since January, 1981 - as long as they choose to maintain the stable measuring unit assumption for an unlimited period of time during indefinite inflation - all else being equal.
Monday, 25 May 2009
The difference between deflation and disinflation
Deflation is a sustained decrease in the general price level resulting in a sustained increase in the real value of the functional currency and other monetary items.
Buy the ebook for $2.99 or £1.53 or €2.68
The functional currency is the currency of the primary economic environment in which an entity operates. It is normally the national or regional measurement currency or monetary unit of account in an economy or monetary union like the Euro in the European Monetary Union.
Deflation only happens below zero percent annual inflation. The functional currency and other monetary items are worth more all the time during deflation as opposed to being worth less all the time during inflation. Deflation is the opposite of inflation. Inflation destroys the real value of the functional currency and other monetary items. Deflation creates more real value in the functional currency and other monetary items.
Disinflation is lower inflation. Prices in an economy are still rising during disinflation, but at a slower rate. The general price level still rises, but, at a slower rate resulting in a continued, but, lower rate of real value destruction in the functional currency and other monetary items.
A lowering of inflation is, by definition, always disinflation. That is the same as a lowering of the rate of increase in the general price level. A lowering of the absolute value of the general price level is deflation.
Deflation means the general price level is not increasing at all, but, actually decreasing continuously and the functional currency and other monetary items are worth more all the time. Deflation causes an increase in the real value of the functional currency and other monetary items.
Inflation destroys the real value of the functional currency. Disinflation destroys the real value of the functional currency at a slower rate. Deflation creates more real value in the functional currency.
Inflation is a sustained increase in the general price level. Disinflation is a slower sustained increase in the general price level. Deflation is a sustained decrease in the general price level.
Disinflation happens, for example, after a period of higher inflation in what are normally considered low inflationary economies and is initially popularly confused with deflation. During disinflation many prominent prices, for example, oil, fuel, property and food prices are falling, but, the general price level is still actually rising, albeit at a much slower rate than during normal low inflation. When the slowing annual inflation rate (slowing increase in general price level) moves lower and lower it eventually gets to a zero percent annual rate for maybe a month or two. There is no increase in the general price level. When the absolute value of the general price level then starts to decrease the economy switches over from inflation to deflation: not just a slower increase in the generally increasing price level as during disinflation but actually a sustained decrease in the absolute value of the general price level below zero percent which causes an increase in the real value of the functional currency and other monetary items: the opposite of inflation.
Countries have little experience of deflation. Deflation is generally regarded as a very serious economic problem that everyone is trying to avoid at all costs especially after what happened during the Great Depression.
Buy the ebook for $2.99 or £1.53 or €2.68
Buy the ebook for $2.99 or £1.53 or €2.68
The functional currency is the currency of the primary economic environment in which an entity operates. It is normally the national or regional measurement currency or monetary unit of account in an economy or monetary union like the Euro in the European Monetary Union.
Deflation only happens below zero percent annual inflation. The functional currency and other monetary items are worth more all the time during deflation as opposed to being worth less all the time during inflation. Deflation is the opposite of inflation. Inflation destroys the real value of the functional currency and other monetary items. Deflation creates more real value in the functional currency and other monetary items.
Disinflation is lower inflation. Prices in an economy are still rising during disinflation, but at a slower rate. The general price level still rises, but, at a slower rate resulting in a continued, but, lower rate of real value destruction in the functional currency and other monetary items.
A lowering of inflation is, by definition, always disinflation. That is the same as a lowering of the rate of increase in the general price level. A lowering of the absolute value of the general price level is deflation.
Deflation means the general price level is not increasing at all, but, actually decreasing continuously and the functional currency and other monetary items are worth more all the time. Deflation causes an increase in the real value of the functional currency and other monetary items.
Inflation destroys the real value of the functional currency. Disinflation destroys the real value of the functional currency at a slower rate. Deflation creates more real value in the functional currency.
Inflation is a sustained increase in the general price level. Disinflation is a slower sustained increase in the general price level. Deflation is a sustained decrease in the general price level.
Disinflation happens, for example, after a period of higher inflation in what are normally considered low inflationary economies and is initially popularly confused with deflation. During disinflation many prominent prices, for example, oil, fuel, property and food prices are falling, but, the general price level is still actually rising, albeit at a much slower rate than during normal low inflation. When the slowing annual inflation rate (slowing increase in general price level) moves lower and lower it eventually gets to a zero percent annual rate for maybe a month or two. There is no increase in the general price level. When the absolute value of the general price level then starts to decrease the economy switches over from inflation to deflation: not just a slower increase in the generally increasing price level as during disinflation but actually a sustained decrease in the absolute value of the general price level below zero percent which causes an increase in the real value of the functional currency and other monetary items: the opposite of inflation.
Countries have little experience of deflation. Deflation is generally regarded as a very serious economic problem that everyone is trying to avoid at all costs especially after what happened during the Great Depression.
Buy the ebook for $2.99 or £1.53 or €2.68
Saturday, 23 May 2009
Targeting 6% inflation is not international best practice.
"Inflation targeting is still seen by the markets as international best practice, which is why SA should stick with it." Greta Steyn, Fin24.com
Targeting 6% inflation is not international best practice.
The EMU, US and UK will never target 6% inflation.
Continuous 6% inflation destroys 6% of the real value of the Rand in one year and 71% in 20 yrs.
SA accountants unknowingly destroy 6% of the real value of Retained Earnings of all SA companies in one year and 71% in 20 yrs when they apply the stable measuring unit assumption for an indefinite period of time.
Mboweni, Greta Steyn and company do not even understand that.
© 2005-2010 by Nicolaas J Smith. All rights reserved
No reproduction without permission.
Targeting 6% inflation is not international best practice.
The EMU, US and UK will never target 6% inflation.
Continuous 6% inflation destroys 6% of the real value of the Rand in one year and 71% in 20 yrs.
SA accountants unknowingly destroy 6% of the real value of Retained Earnings of all SA companies in one year and 71% in 20 yrs when they apply the stable measuring unit assumption for an indefinite period of time.
Mboweni, Greta Steyn and company do not even understand that.
© 2005-2010 by Nicolaas J Smith. All rights reserved
No reproduction without permission.
Subscribe to:
Posts (Atom)